Grocery Tracker: Sustainable Insight

Another rough week for grocery stocks, as values across tracked companies saw declines entering into March — with one notable exception.

Ahold Delhaize was the only grocery stock to see upward motion in the past week, mostly in a mid-week spike in value that was then dampened as the weekend approached. Prices of the international food retail group’s stock closed out on Friday at €20.50, up 0.94 percent from Thursday’s close, as well as for the week, continuing the relative upward trend seen since the beginning of December last year.

Costco saw some record highs last week and into the first week of March, but they didn’t last. Friday trading opened down nearly 4 percent from Thursday’s close. At the time of writing, Costco had dipped lower, down 4.13 percent to $170.62.

Kroger also saw values drop into the first week of March, exacerbating the downward trend which started in the latter half of February. While midweek trading was relatively flat, Thursday opened down, and Friday dug it deeper. At the time of writing, Kroger was down 2.55 percent to $29.86 — the first time KR had dipped below $30 since the end of September last year.

Whole Foods also trended downward for the week, with Friday morning’s open digging the hole that much deeper. At the time of writing, WFM was down 2.38 percent from Thursday’s open to $29.74, though it looked to have already hit its bottom earlier Friday morning.

A number of major retail studies have shown that millennial consumers value the sustainability, health value and organic nature of brands and products when making purchases.

Most recently, a report from consumer packaged goods marketing agency Acosta indicates that the three key motivations for shoppers to buy naturally include avoiding chemicals traditionally found in mass-produced foods, a perceived improvement in food quality and an overall perceived improvement of family health as a result.

While price is the biggest barrier for consumers when shopping organically — according to the Acosta study — conflicting information and studies about products, as well as confusing label information, leads to a barrier to purchase. Acosta found that the three most popular sources of product information for organic shoppers are product packaging, in-store signage and their own internet research.

In the study, Acosta found that nearly 73 percent of millennials surveyed reported spending time on product researching before spending a dime.

“Motivated by a desire for better health and transparency, natural and organic shoppers are a powerful force that retailers and brand marketers must study and speak to carefully,” Colin Stewart, Acosta SVP, was quoted as saying. “This category is one of the most important sales and marketing opportunities in retail grocery today, and all indications are strong [that] growth will continue well into the future.”

While the clean label movement is an attempt to improve consumer comprehension of what’s in their food, trust in food manufacturing industry labeling practices is low. According to a C&R research study, for instance, some 48 percent of respondents reported never trusting food labels.

New York-based consumer data company HowGood is making strides to cut back on the amount of personal time product research requires – and to potentially boost consumer confidence in the food products they buy. The startup provides these increasingly sustainability-minded consumers with ratings and additional information on grocery products — assessing everything from food, to household products and personal care items.

In short, HowGood literally answers the question, “How good is [insert product, brand or store location here]?” for consumers who want to know more before buying.

The company reportedly evaluates products for their environmental, health and trade impacts; consumers access these ratings via HowGood’s website or mobile app. Some stores have even started carrying HowGood’s ratings signage, and, for some products, consumers can scan the item’s barcode to retrieve ratings on their phones.

Consumers aren’t the only ones taking notice. HowGood recently announced that it had closed a $4.2 million Series A venture funding led by FirstMark Capital, with additional participation from Contour Ventures, Humanity United and Serious Change LP, among others. The most recent round brings the startup’s total funding to $6.2 million in two rounds, including a seed round back in 2014.

With the Series A funds, HowGood looks to expand to a wider range of products, including cosmetics and grooming, said TechCrunch. Additionally, HowGood reportedly wants to put some of the cash toward technical research and development, with the goal of expanding the channels on which users can access HowGood’s ratings data.